Monday, October 31, 2011

Agreement Reached in DirecTV vs. FOX Dispute

Confirmed: Shortly before 6:30PM ET, the news was released that an agreement has been reached in the ongoing dispute between DirecTV and FOX. Cable networks like SPEED, FUEL and FX will be unaffected and the agreement extends to other FOX cable networks and local broadcast stations. Thanks for your patience, more details will be added when released to the media.

It's crunch time for the latest media crisis involving the struggle between content providers and distributors. This time, DirecTV is facing off with a slice of the FOX franchise that provides cable network content.

The equation is simple. The current agreement for a package that includes FX, SPEED, FUEL and the FSN regional sports networks is set to expire. DirecTV has indicated that FOX is seeking a substantial increase in payment for delivering these services. Numbers used to describe the increase range from 25 to 38%. DirecTV is not going to agree to the increase and will remove these networks on Nov. 1 from the service.

There is no love lost between these two parties. The current CEO of FOX used to run DirecTV. FOX has a long history of playing hardball with distributors. The DirecTV strategy is to set a deadline for removing these networks and negotiate against that deadline.

In essence, DirecTV is using the only real weapon it has and that is to discontinue distributing content to the 19.4 million homes it services. In response, FOX expanded the online propaganda to include statements that were not true. DirecTV then complained to the FCC.

"Fox is using misleading advertising informing DirecTV customers that 'soon, in some markets, you may lose your local Fox station,'" DirecTV Executive Vice President Derek Chang wrote to the FCC. "Even if the Fox cable channels are no longer carried on Nov. 1, the broadcast stations are covered under a separate agreement, which does not expire until Dec. 31."

FOX had begun to say online and in media releases that the FOX News Channel and local FOX over the air TV stations would be lost in this agreement. That is not accurate and is intended to mislead consumers.

The last update on the negotiations was Saturday before the parties broke for the weekend. At that time, the sides were far apart. In a nutshell, FOX is trying to ram this agreement through using the current hit shows on FX as the leverage. Sons of Anarchy, American Horror Story and others have given the FX primetime a boost.

One real issue on the table is that FOX has constructed a series of cable networks that simply "churn" content during the daytime on weekdays and depend on primetime and weekends to provide original and popular programming.

SPEED is a good example of this type of network. Between 3AM ET and 6PM on weekdays the network is a hodgepodge of content. There has never been an original morning show, there is no content designed for afternoons and currently the Monday through Thursday primetime line-up is a disaster.

SPEED recently moved NASCAR RaceHub out of primetime in the heart of the NASCAR season and replaced it at 7PM with two re-airs of the "drag racing" show Pass Time. Click here for a story on the new series SPEED ordered for 2012.

DirecTV has a point. What FOX is offering is basically several series on FX and the regional sports networks showing NBA, NHL and MLB programming. It should be interesting to see how negotiations progress today as the Nov. 1 deadline approaches.

Update #1: At 12:55PM, the Hollywood Reporter confirmed negotiations are in progress, but both sides declined comment.

Update #2: At 1:30PM ET all the SPEED twitter accounts are now tweeting the link to the Facebook page containing the FOX anti-DirecTV video. It never mentions the substantial rate increase demanded by FOX, only tries to scare DirecTV subscribers about losing FX shows and sports programming.

Update #3: At 2PM FOX fired back at the perception they are the bad guys in this dispute. Latest from Fiercecable.com: "Yes we are still negotiating and are hopeful the parties can reach an agreement," said Fox senior VP of communications Scott Grogin. "We plan to leave our signals up and available to DirecTV. If the signals come down, it will be because DTV took them down," he added.

Update #4: 3:30PM and Variety updates that no information is out, both sides continue to negotiate. SiriusXM's Pete Pistone tweeted DirecTV spokesman told him to expect SPEED and other nets in deal to be removed at midnight PT.

Update #5: At 5:30PM, DirecTV said "We are actively in discussions & hope to reach a fair agreement." Told both sides talking, but no hint of resolution at this time.

Update #6: at 6PM, DirecTV on FOX actively encouraging existing DirecTV customers to cancel service and switch to cable TV - "Switching only helps FOX charge a higher price, and will result in a higher monthly bill for you, no matter who you get your TV service from. News Corp and FOX are by far the most aggressive programmer in the industry. They want you to switch so they can put more pressure on DIRECTV to agree to their outrageous price increase. FOX will then take that new price to all the other TV providers, demand they also pay the new higher price, and start scaring their customers into switching service."

We will continue to update this story and post updates on this main page. Today is a critical day for both sides to either agree to a compromise deal or stand their ground and let the services in question go dark. Stay tuned.

To add your comments on this topic, just click on the comments button below.

26 comments:

I'm a DirecTV customer, so I hope this is resolved before tomorrow. I have already complained to DirecTV about not a good time to be greedy, would like to see send the same comment to News Corp if I had a way to do so. But I recently upgraded my equipment and am locked into a new contract. There's not much I can do other than take and offer my complaints.

DirecTV would do well to remember how many new customers they got around 12 years ago when Turner Cable got into a p*ing contest with ABC/Disney. ABC/Disney even went so far as to offer a $100 rebate to folks who switched to DirecTV. Hey Fox, there's an idea for you....

Disputes like this are always hard to watch. It’s a battle between content and pricing, how much are your favorite shows worth to you? I’m glad to see that companies like DISH are trying to reduce the frequency of these negotiations since they are painful for everyone. I know this because I work for DISH and they’ve recently signed a long-term contract with FOX to avoid issues like this. If I didn’t already have it, I’d switch to DISH just to avoid these battles.

It’s never a good feeling knowing that you may not be able to watch your favorite shows and I completely understand how customers are feeling because I’ve been through it before. I was a DISH Network customer and employee around the same time last year and it was tough, but DISH and FOX were able to come to a long term agreement that ensured I wouldn’t lose my favorite FOX channels for years to come and I wouldn’t have to pay an arm and a leg for them. I know the deadline is tonight at midnight and I’ve been encouraging people to switch over to DISH Network because not having “American Horror Story” or your favorite FOX networks isn’t worth thinking about.

Wow, that is a really lame plug to try to get people to switch the Dish Network. I highly doubt that you could even get Dish to schedule an installation before Wednesday (when AHS is on).

This will get worked out like it always does. I dropped Time Warner because of their constant battles with channels, but the difference was that whether they won or lost (or even when there wasn't anything going on), the price would go up almost monthly. DTV has done a good job of keeping prices fairly static.

Plus, it's 2011. If I lose FX, there are plenty of ways to track down the 2-3 shows I watch on the network.

Well the 2 comments on the bottom are obviously dish commercials. I'm sorry but I agree with Direct TV, I don't think fox has the programming that should make my subscription go up. If they turn off the fox channels that will make room for better programing, the only channel affected I actually watch is speed and thats only a couple programs on sundays. I wouldn't switch to dish just because of this, actually I wouldn't switch to dish if they gave me 5 years free. stick to your guns Direct tv, fox isn't worth the hassle.

DIRECT TV charges enough as it is!!! Im glad there doing this... Guess I will have to bite the bullet the next 3 races and not have speed for practice and such! But thats all Speed is good for anyways so whatever. Fox can stick it if you ask me! I dont watch FX never will and Speed sucks @ hole during the week its a shame they want more money for that crap!

I predict this willl be resolved and at an amount less than 40% as was the case with Dish last year. That agreement will be, I think, the model as is the case with UAW negotiations with the automakers.

But for both sides it is in today's media world a potentially hazardous drill to repeat too often. With the web there are a variety of ways to obtain content, and to obtain the content you want. Some, perhaps most, are of questionable legitimacy, but they exist. Add to that the concept of total cord cutting. I did that one back during the last decade and after a period of adjustment lived quite well. I would, in fact, most likey still be that way if not for having in residence until she died an elderly relative. As it stands it is more momentum than need that keeps me hooked up. If the price becomes too much or the offerings too skimpy I can do it again.

And btw with the net tactic you might even find new and unexpected things as I have since rigging my TV to the computer. Who, after all, will possibly miss "Race Hub" after they have found things like the CBC's "Little Mosque on the Prarie" ?

Yes. It is a real show. A sitcom. Canada is in a number of ways so much more civilized.

I finally gave up caring about multi-billionaire companies and their disputes with each other. Been a DirecTV customer since 1997. My life is in no way ruined because I can't watch a favorite show or sporting event anymore. If those channels are in the lineup great, if not then I expect to see a price decrease.

Even though I have Dish, I hope Direct hangs tough. If they cave to Fox, other providers will view them as an easy target and do the same thing. It would also encourage Fox to do the same thing with other providers even more than they do now.

Fox must be hanging their hopes on FX (which doesn't interest me at all) because Speed becomes useless to most race fans in under 3 weeks and it always has been to the majority of the population.

Just so everyone at FOX and DirecTV understand, the only purpose FOX serves in my household is the delivery of one pro football game a week and delivery of NASCAR races. FOX has worked overtime since 1986 to alienate me personally and they have done a wonderful job. Congratulations.

I don't really care anymore aboutthese t.v.sqabbles.Here on the left coast T.V. scheds.are useless anyway.I'll continue to get info from the internet.I remember getting NASCAR coverage from MOTOR TREND mag. and ABC Wide World of Sportst.v. back in the 1960's.Now I get from the internet.No need to watch shows(pre,durinig,and after)follow their scrpted commentary.Much happier with the D.P. and JAYSKI.